After the settlement money is negotiated and come to final terms the court order will request the funds to be placed into a type of income annuity contract called structured annuities.
What is a structured settlement or annuity.
Structured settlement annuities are designed to offer the benefits of a structured settlement while reducing or eliminating the potential drawbacks.
The difference is annuities are bought and they come through investment firms and insurance companies.
The key difference between an adult owning a structured settlement and a minor owning one is control.
However many legal settlements offer a lump sum payment option which provides a one time sum of money.
How does a structured settlement work.
A structured settlement is a way of settling a lawsuit using a combination of cash and customized stream or streams or future periodic payments.
You ll find that lottery winnings can be paid out in the form of an annuity to stop the winner from spending too much.
A structured settlement pays out money owed from a legal settlement through periodic payments in the form of a financial product known as an annuity.
Cons once the terms of a settlement are finalized there s little you can do to alter them if they do not meet your needs.
A structured settlement annuity is a way for someone who wins a legal settlement to receive the payout.
An annuity will pay out annually but so can a structured settlement.
Structured settlements for minors are usually paid through an annuity from a life insurance company just as for adults.
A structured annuity also known as a structured settlement or a periodic payment judgment is an annuity or group of annuities with a very short accumulation phase funded by a lump sum payment similar to a single pay annuity.
An annuity is one of the types of qualified funding assets for a structured settlement.
When used properly they can be a very effective tool for protecting a settling plaintiff s long term financial security.
Instead of receiving all the money in one lump sum the plaintiff puts their money in an annuity which is a type of financial contract.
A structured settlement is not an annuity.
A structured settlement annuity contract often yields in total more than a lump sum payout would because of the interest the annuity may earn over time.